Aryzta AG

09.30.2012

The North American baking businesses of Aryzta AG, Zurich, Switzerland, posted strong earnings and sales growth in the fiscal year ended July 31, 2012, and accounted for a growing share in the global corporation’s bottom line.

Aryzta is an international food company with a leadership position in specialty bakery products. The company was formed in 2008 through the merger of Dublin-based IAWS Group P.L.C. and Hiestand Holding AG of Switzerland.

The Food North America division of Aryzta was assembled through IAWS Group acquisitions before the merger and by high-profile acquisitions made by the new company in 2010.

The pre-merger IAWS Group North American acquisitions included La Brea Bakery, a leader in the artisan bread movement, which was acquired in 2001, and Otis Spunkmeyer, a U.S. manufacturer known for its frozen cookie dough, muffins and other baked goods, which was acquired in 2006.

Major post-merger acquisitions, all completed in 2010, included Fresh Start Bakeries, a global supplier of specialty bakery products with a leading position in the quick-serve restaurant segments; Pennant Foods, a provider of specialty bakery products to the North American quick-serve restaurant, food service and retail in-store bakery sectors, and Sweet Life, a baker of sweet baked goods serving the North American and Asian quick-service restaurant sectors. Also acquired in 2010 was Maidstone Bakeries of Canada.

EBITDA within the Aryzta Food North America division in fiscal year 2012 increased 19% to €176,291,000 ($227,650,000) from €148,673,000 in fiscal 2011. Revenue in the division rose 13% to €1,372.4 million ($1,772.4 million).

“The underlying organic growth in North America was very strong, reflective of progress on deepening customer relationships and increased availability of a broader range of products to North American customers,” the company said. “The performance also benefited from stronger consumer spending trends in North America compared with Europe.”

In reviewing the fiscal year, Owen Killian, Aryzta’s chief executive officer, noted the growing importance of the North American business.

“I guess the most important part of our transition over the last six years has been diversifying our geography,” he said. “In 2004, we had 83% of our revenues in Europe. In fact, that 83% was almost entirely Ireland and the United Kingdom. By 2008, with the creation of Aryzta and the merging with Hiestand, 71% of our business was in Europe, 28% in North America and 1% in the rest of the world. Three years later, by 2011, we had a much better balanced geography; 46% of our business in Europe, 47% of our revenues in North America, and 7% of our revenues in the rest of the world.”

Aryzta’s global Food Group EBITDA aggregated €374,826,000 ($484,035,000) in fiscal 2012, up 16% from €322,312,000. Sales rose 11% during the year to €2,867.6 million ($3,703 million).

“Aryzta’s performance in fiscal year 2012 was satisfactory given the challenging macro environment,” Mr. Killian said. “The business performance reflects the benefits of good progress on implementing internal transformation measures designed to better support our customers. This will continue throughout fiscal year 2013.”